Long Term Care Insurance

Demystifying Long Term Care Insurance

Part 1: What is Long Term Care Insurance?

This is the first post of a five-part series intended to share more about the complex world of long term care insurance and its impact on home care consumers.

What is Long Term Care Insurance

Long Term Care Insurance (or LTCI), is an insurance benefit that covers services necessary to meet health or personal care needs for a qualifying older adult over an extended period of time. When we turn 65, we become eligible for Medicare, but Medicare does not reimburse costs for long term care, like home care, assisted living, and nursing homes. LTCI policies are purchased for this specific need.

Individuals buy policies between ages 40-60, in the anticipation of needing some form of long-term care. Policies must be purchased beforehand. Over time, you will pay a monthly premium (which varies based on your age, health history, and benefits) in order to access a predetermined pool of benefits when you meet the requirements to open a claim.

Long-term care insurance policies reimburse policyholders up to a pre-selected limit for services. People are eligible to receive their long term care benefits if they are unable to perform 2-3 basic activities of daily living (dressing, bathing, eating, toileting, continence, transferring, and walking), or have a note from a doctor verifying cognitive impairment. People with severe cognitive decline are also eligible for long term care insurance coverage.

My long term care insurance has allowed me to stay in my home. I'm glad I kept paying into the policy!

Next week, we'll dig into the fundamentals of LTCI policies and what every policyholder should know about their policy.